Scaling Decision Making
Don't overlook this while growing the company
Last week I talked about decision-making in complexity. A few weeks ago I wrote about the challenges at the Director level. This week I found another angle and wrote about it again. As you can tell, this subject has been on my mind. I hope you find today’s topic as fascinating as I did.
The exec team at a scaling startup had made a string of ill-advised decisions impacting a key product. George, a mid-level leader responsible for this product was only informed about decisions after they were made. The trouble was that the choices would dramatically change the product in ways that might erode the brand’s reputation and cause key customers to leave. When informed of the latest decision, George spent hours sharing additional information and proposing alternate choices, ultimately convincing the senior leadership team to alter their path. This poor decision was averted but the stress of having responsibility but regularly being left of decisions was starting to pile up.
“Do I need to get better at influence?” George wondered.
George’s ability to influence wasn’t the issue. There was a larger organizational problem at play. George was encountering an org smell, a phenomenon I’ve talked about here and here. In short, an org smell is a surface indication that something is amiss at the organizational layer. In this case, the org smell was a leadership team failing to scale decision-making along with the growth of the company.
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This is a common scale-up org smell. As the company scales, we look for ways to streamline and become effective engines for growth. It’s part and parcel of this business phase. A once flat organization gives way to more hierarchy. As the org grows and hierarchy solidifies, it’s tempting to simplify by narrowing the voices in the room. We think it will help us move faster to centralize decisions in senior leaders. With fewer voices around the table, we don’t worry about creating more robust structures. We don’t consciously talk about how we’re going to decide. We default to an inconsistent process — perhaps the loudest voice in the room or latest issue of the day.
While we understand that the surface area has grown, we haven’t quite grappled with how it impacts our decision-making structures. We think it’s our job to make decisions on behalf of the organization. We stop asking for input from the people doing the work. Senior leaders get bogged down. We become blockers. Further away from the work, we make ill-advised choices.
As we scale, we’re better off seeing ourselves as shepherds of decisions, guiding rather than controlling. As scaling leaders, our job isn’t to make all the decisions or even most of them. Our role is to: 1) have a clear rubric around decision making — where they get made, how they get made and who gets to make which ones 2) disseminate the power to decide throughout the org.
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Let’s take the experience of another scaling company.
Recognizing the need to move faster and make better decisions, the engineering team at scaling startup Griffin developed a well-articulated decision-making framework. VP of Engineering James Trunk shares how the model works here. I love their first step, “Identify a decision that is complex, important, or irreversible.” This acknowledges that all decisions are not the same, driving more into the hands of the team democratizing rather than centralizing power in the hands of a few. Their process makes organizational decision-making more collaborative. They demonstrate how powerful it can be to have a clear decision-making process that is consistently used and everyone understands.
As they scaled, Griffin deliberately designed decision-making structures that fit their current situation. In contrast, by centralizing choices and leaving critical voices out of the process, George’s company struggled to scale decisions as they grew. Being left out of important conversations forced George to be reactive. Unable to overcome the organization’s dysfunction and tired of having to fight for a seat at the table, George left. The company lost a strong leader who was their biggest customer advocate, and institutional knowledge along with it. Imagine what they might have accomplished if the company had been more deliberate in scaling this part of their organization.
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How do you know if you have this particular org smell? Here are a few things to look for.
Decision-making is likely centralized. There’s a lack of a defined process or one that is shared widely. Once they reach a wider audience, organizational decisions are met with strong resistance. The leadership team finds itself having to reverse decisions because they’ve discovered information demonstrating there’s a better choice. Mid-level leaders are unclear about what decisions they can make autonomously.
Scaling is often a fraught phase of business. We’re trying to build upon our past success but what got us here won’t get us there. We must recognize how the change impacts all aspects of how we operate. We must be deliberate about designing decision structures. We must delegate more, especially decisions. When done well, scaling becomes easier, allows us to go faster, be more effective, and create a culture where people want to be.
PODCAST EPISODE OF THE WEEK
Natasha Vernier was introduced to me by Maria Campbell, the COO of Griffin. The two worked together at Monzo where the seed for Natasha’s startup Cable was planted. It was fascinating to learn about Cable’s mission to reduce financial crime. We also talked about leaders' role as stress absorbers, the difference between being a leader and a CEO/founder, and what it’s like starting a family and founding a company…at the same time.
If you’re interested in fintech or what it’s like to found a company while having small children you’ll want to tune into episode 16 of Leaders Unscripted.
Here’s a small snippet from my conversation with Natasha.
You can read my conversation with Natasha here.
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